The Immorality if Sin Taxes

A Joke: In South Carolina, taxes on cigarettes go to fix the roads. Let's light up and fix these bumpy roads!

Sin Taxes Create Sinful Government Incentives
Presently, corrective taxes are all the rage in policy circles and academic institutions. Although a corrective or "sin" tax may encourage someone to do less of a bad thing, the process creates the wrong incentives for government because the government profits comparatively more from the sin than other taxed activities, or, it profits more from bad behavior than from good behavior. For instance, the government would benefit more from heavily taxed whiskey than from ordinarily taxed orange juice.

The tax penalty a smoker incurs that induces him to buy fewer cigarettes could be considered a moral good if we ignore any principle of liberty* and if the story ended there. But the story does not end there. The government takes revenue derived from a bad activity and then uses it for, let's assume, a good activity like reservoir maintenance or road repair. Doing good things with money gotten from bad activity becomes bad when the incentive to do more good things requires that there be more bad behavior to tax. A sin tax is not a total gain because even though the disincentive to smoke may be a plus, the incentive to do good things with revenue reliant on bad behavior is a negative. Even further, sin taxes are slightly immoral insofar as their objective is to create a greater good, because they inherently fail a little and are therefore a little deceitful. A sin tax is therefore slightly sinful itself.

Consider a sin tax on carbon emissions. The more carbon emissions, the more revenue, the more of an incentive government has for more emissions, and hence the more useless leveraging without actual moral improvement.

Perhaps by utilitarian means, one could argue that the bad government incentives pale in comparison with the good incentives that encourage people to sin less. But, this analysis fails the higher scrutiny used in most Catholic understandings of morality. In order for an act to be considered moral, it must be good in its intentions, action, and results. So even if we assume sin taxes are good in their intent and results by utilitarian reasoning, we have shown earlier that they inherently fail to be good in their action because their action is sustained in part by bad behavior, and this bad behavior cannot be said to be good.

In sum, government cannot create morality via taxation without absorbing some immorality itself, and the overall morality it may create fails to be moral under a Catholic pretext, to the extent that some might even say sin taxes are immoral.
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*We would also assume that the government knows best.